RUKMANI WIRES PVT LTD,NEW DELHI vs. DCIT CIRCLE-21(2), NEW DELHI

ITA 5481/DEL/2019Status: DisposedITAT Delhi29 August 2024AY 2015-16Bench: SHRI M. BALAGANESH (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)7 pages
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What did the Tribunal hold?

The Tribunal held that Section 115QA was not applicable as the buy-back consideration was less than the issue price, meaning there was no 'distributed income', and consequently, Section 10(34A) also did not apply. Thus, the denial of long-term capital loss was legally incorrect, and the assessee's claim was an incorrect interpretation of law, not furnishing inaccurate particulars, rendering the penalty under Section 271(1)(c) unsustainable. The penalty was directed to be deleted.

What were the facts?

The assessee, Rukmani Wires Pvt. Ltd, filed a return declaring a long-term capital loss of ₹2,81,47,885/- from the buy-back of shares of Kansil Alloys Pvt Ltd. The Assessing Officer denied the carry forward of this loss, citing Sections 10(34A) and 115QA of the Income-tax Act, and subsequently levied a penalty under Section 271(1)(c) for furnishing inaccurate particulars of income, which was upheld by the CIT(A).

What were the issues?

Whether penalty under Section 271(1)(c) for furnishing inaccurate particulars was justified for claiming long-term capital loss from a share buy-back, considering the applicability of Sections 115QA and 10(34A) when the buy-back consideration was less than the issue price.

Which sections of the Income-tax Act were involved?

Section 271(1)(C),Section 143(3),Section 10(34A),Section 115QA,Section 46A,Section 18,Section 48

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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI

Before: SHRI M. BALAGANESH & SHRI VIMAL KUMAR

For Appellant: Shri Lalit Mohan, CA, Shri Parth Singhal, Adv
For Respondent: Shri Vivek Vardhan, Sr. DR
Hearing: 03/06/2024Pronounced: 29/08/2024

PER M. BALAGANESH, A. M.:

The appeal in ITA No.5481/Del/2019 for AY 2015-16, arises out of 1. the order of the Commissioner of Income Tax (Appeals)-38, New Delhi [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. 340/2018- 19 dated 22.04.2019 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 30.11.2017 by the Assessing Officer, ACIT, Circle-21(2), New Delhi (hereinafter referred to as „ld. AO‟).

2.

Ground Nos. 2, 3 and 5 raised by the assessee were stated to be not pressed by the ld AR for which necessary endorsement was duly made in our file. Accordingly, the Ground Nos. 2, 3 and 5 are hereby dismissed as not pressed. Rukmani Wires Pvt. Ltd

3.

The order continues below.

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